Correlation Between Genpact and Dun Bradstreet

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Can any of the company-specific risk be diversified away by investing in both Genpact and Dun Bradstreet at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Genpact and Dun Bradstreet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genpact and Dun Bradstreet Holdings, you can compare the effects of market volatilities on Genpact and Dun Bradstreet and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Genpact with a short position of Dun Bradstreet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genpact and Dun Bradstreet.

Diversification Opportunities for Genpact and Dun Bradstreet

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Genpact and Dun Bradstreet is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Genpact and Dun Bradstreet Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dun Bradstreet Holdings and Genpact is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Genpact are associated (or correlated) with Dun Bradstreet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dun Bradstreet Holdings has no effect on the direction of Genpact i.e., Genpact and Dun Bradstreet go up and down completely randomly.

Pair Corralation between Genpact and Dun Bradstreet

Taking into account the 90-day investment horizon Genpact is expected to generate 1.25 times less return on investment than Dun Bradstreet. But when comparing it to its historical volatility, Genpact is 1.71 times less risky than Dun Bradstreet. It trades about 0.25 of its potential returns per unit of risk. Dun Bradstreet Holdings is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,381  in Dun Bradstreet Holdings on May 15, 2022 and sell it today you would earn a total of  246.00  from holding Dun Bradstreet Holdings or generate 17.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Genpact  vs.  Dun Bradstreet Holdings

 Performance (%) 
       Timeline  
Genpact 
Genpact Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Genpact are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Genpact exhibited solid returns over the last few months and may actually be approaching a breakup point.

Genpact Price Channel

Dun Bradstreet Holdings 
Dun Bradstreet Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Dun Bradstreet Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Dun Bradstreet is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Dun Bradstreet Price Channel

Genpact and Dun Bradstreet Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Genpact and Dun Bradstreet

The main advantage of trading using opposite Genpact and Dun Bradstreet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genpact position performs unexpectedly, Dun Bradstreet can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Dun Bradstreet will offset losses from the drop in Dun Bradstreet's long position.
The idea behind Genpact and Dun Bradstreet Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center. Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Money Managers module to screen money managers from public funds and ETFs managed around the world.

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